Our client was a haulage company, based in the North West. The company originally employed 20 members of staff and had a number of on-going contracts with one major customer. Things were going well until the customer told our client that they had to move trading location, otherwise all the contracts would be withdrawn.
Our client agreed that it would move, although this did result in an increase in fuel expenses and a subsequent downturn in cashflow. Several months later, the customer requested that our client should tender for the renewal of the contracts. Due to its increased fuel costs, our client’s tender was higher than previously – which resulted in them losing the contracts.
This meant immediate cashflow problems for our client. The director cancelled all the company’s direct debits to ensure that the employees’ wages could be paid. However, one direct debit payment was accidentally made to one of the company’s creditors. This left the director with no surplus funds to pay the wages and continue trading.
An affordable insolvency solution
The director asked Clarke Bell for our specialist advice on what they should do. Having considered their situation and the available options, it was agreed that a Creditors’ Voluntary Liquidation (CVL) was the best solution.
With the CVL process, we were able to help the director meet all the necessary legal obligations and deal with the insolvency of his company. Crucially, he was able to do all of this without having to look over his shoulder – secure in the knowledge that everything had been done correctly and legally.
John Bell, the senior partner at Clarke Bell, said:
“Having one big client is great, unless you lose that client. And then your whole business is at risk.
In this case, a CVL was the only viable option. It meant that the company director was able to deal with his unfortunate situation and address all his legal duties. Despite his lack of cashflow, he was still able to afford our fees which are made deliberately affordable for situations like this.
The director was then able to learn from this experience for the future business ventures he embarked upon.”